Keep money flowing south, urge London leaders

BORIS Johnson’s pledge to invest more in the Midlands and the North has prompted concern among politicians and business leaders in London.

Leaders in the North and Midlands are waiting to see whether the Government will make good on its pledge to introduce an “infrastructure revolution”, following last year’s general election campaign in which Mr Johnson’s Conservatives made significant gains outside London.

But senior figures in the capital are already pushing the Prime Minister to ensure money continues flowing into the south.

They include London Mayor Sadiq Khan, who told the Financial Times: “The way to make the country more equal should not be to make London poorer.”

He said: “I am worried that there are those within government who think you can narrow the gap between London and the rest of the country by starving our capital city of investment and taking its position as a global economic powerhouse for granted. You can’t.”

Business group London First, which represents employers in the capital, is also lobbying the Government, according to reports.

Paul Drechsler, the organisation’s chair, said: “London is the most vibrant, exciting, dynamic, successful city on planet Earth but when there’s talk of building and levelling up everywhere else, we need to ensure London remains the most successful dynamic city in the world.”

There is particular concern about plans to change the way that the

Treasury evaluates proposals capital spending.

Traditionally, the main criteria used has been how much a project will contribute to economic growth.

But this tends to ensure funding goes to the south, because investing in areas where the economy is already strong generally leads to the best economic outcome.

Under proposed changes, the Treasury will consider criteria such as narrowing the productivity gap between regions or improving the wellbeing of people living in poorer areas.

This will make it easier to justify spending money in areas which currently have lower economic output.

Figures from think tank IPPR North show the size of the investment gap at the moment. Analysis

for by the think tank found the West Midlands is currently due to receive investment of £254 per person each year, compared to £1,943 per person in London.

Chancellor Sajid Javid is expected to include infrastructure announcements in his budget.

West Midlands Mayor Andy Street has been pushing the Chancellor to provide funding for an extension of the Midlands Metro, which he says is “shovel ready”.

The East Birmingham Solihull Extension will extend the Metro from Birmingham city centre’s Eastside area to the NEC, Birmingham Airport and to the planned HS2 high speed rail interchange station in Solihull.

The plan is to route the new line through some of the less-wealthy neighbourhoods in Birmingham.